22nd Century (US:XXII)2023-05-09 10:14Revenue Performance - Net revenues for Q1 2023 were $21,962, an increase of 142.8% from $9,045 in Q1 2022, driven primarily by hemp/cannabis revenue of $13,035 due to the acquisition of GVB[167] - Revenue from tobacco-related products for Q1 2023 was $8,927, a decrease of 1.3% from $9,045 in Q1 2022, reflecting a planned reallocation in production resources[171] Profitability and Loss - Gross profit for Q1 2023 was a loss of $1,177 compared to a profit of $309 in the prior year period, with gross profit margin declining to (5.4)% from 3.4%[167] - Operating loss for Q1 2023 was $17,823, compared to a loss of $8,146 in the prior year period, representing an increase of 118.8%[167] - Net loss for Q1 2023 was $18,182, with a net loss per share of $0.08, compared to a net loss of $8,918 and a net loss per share of $0.05 in Q1 2022[167] Operating Expenses - Total operating expenses for Q1 2023 increased to $16,646, up 96.9% from $8,455 in Q1 2022, primarily due to increased SG&A expenses driven by the acquisition of GVB[167] - R&D expenses increased by $376 million, a 33% rise compared to 2022, driven by higher compensation and benefits for additional personnel[179] - Other operating expenses totaled $898 million for the three months ended March 31, 2023, significantly up from $52 million in the same period of 2022[180] Cash and Investments - Cash, cash equivalents, and short-term investments as of March 31, 2023, totaled $16,227, with an additional $7,500 in restricted cash[171] - Cash and cash equivalents rose to $10,952 million as of March 31, 2023, compared to $3,020 million at December 31, 2022[185] - Net cash used in operating activities increased to $17,500 million in Q1 2023, up from $7,928 million in Q1 2022, primarily due to a higher net loss[189] - Cash provided by investing activities was $14,723 million for Q1 2023, compared to $8,772 million in Q1 2022, reflecting a $5,951 million increase[190] - Cash provided by financing activities increased by $18,805 million in Q1 2023, driven by proceeds from long-term debt issuance[191] Financing Activities - The company entered into a new Senior Secured Credit Facility, issuing $21,053 million in debentures with a 7% interest rate, maturing on March 3, 2026[194] - The company executed a Subordinated Promissory Note with a principal amount of $2,865 million, maturing on May 1, 2024, with interest accruing at 26.5% per annum[197] - The company plans to raise up to $50,000 million through an ATM Offering for general corporate purposes, including business expansion and R&D[199] Insurance and Claims - The company received $5,000 in casualty loss insurance recoveries from the Grass Valley fire during Q1 2023, with additional claims expected[171] - The company anticipates approximately $2,258 in business interruption insurance claims to offset margin losses due to increased raw material costs[173] Accounting and Risk Management - The Company uses a Monte Carlo valuation model to estimate the fair value of detachable warrants, with key assumptions including expected future volatility and expected life of the warrants[207] - There have been no material changes to the market risk information disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[210] - The Company does not have any off-balance sheet arrangements as defined by Item 303(a)(4) of Regulation S-K[209] - The Company evaluates new accounting pronouncements to assess their potential impact on financial statements[208] New Services - The company launched a new CDMO+D service offering for the hemp/cannabis sector in Q1 2023, enhancing its capabilities in ingredient supply and manufacturing[167]